Apple's Worldwide Developer Conference kicked off Monday at San Francisco's Moscone West convention center. The keynote address, by Steve Jobs, began at 10 am Pacific time.

The event began with a video featuring John Hodgman, the PC of the Mac and PC ads, dressed as Steve Jobs. "I've got some big news this year, I want the whole world to hear it -- I quit," Hodgman said. "And what's more, I'm shutting down all of Apple. I know this comes as a surprise, but I didn't have a choice -- Vista has sold tens of dozens of copies... Then I got my iPod killer, the Zune. Look at this baby. Brown!"

"I'm sure you'll agree that it's time for Apple to wave the white flag," Hodgman said. Then Justin Long, the actor who plays the Mac in the ads, confronts Hodgman with the news that he's not Steve Jobs. "You're right," Hodgman says. "I'm Phil Schiller."

After the video played, Jobs took the stage to applause.

Intel kudos

The focus of last year's WWDC was the transition to Intel microprocessors, noted Jobs.

"We did that transition successfully, and everyone did an awesome job," Jobs said, including engineers inside of Apple and the developers present at this year's WWDC. Jobs then invited Intel CEO Paul Otellini up on stage.

Complementing Otellini and Intel on a job well done and to recognize their hard work in helping Apple with the Intel transition, Jobs apologized. "Paul, we're not big on awards at Apple, so we don't have anything real standard, so I asked Jonny Ive to make something for you. It says, our sincere thanks," he added. Jobs then presented Otellini with a disc made of polished stainless steel.

"I have two daughters, they live on their MacBook. I have friends in business, they live on OS X. Our CTO at EA lives on Mac and we're seeing EA technologists move to Mac in droves. And what do they want, in addition to a Cinema Display? They want to go to Apple stores and see EA games. And so that's what we're going to do," Gordon said.

Gordon said that EA is going to bring "four of our biggest titles" to the Mac starting next month: Command and Conquer 3, Battlefield 2142, Need for Speed Carbon and Harry Potter and the Order of the Phoenix.

What's more, EA will be bringing sports games to the Mac in August, beginning with simultaneous launches of Madden 08 and Tiger Woods PGA Tour 08.

Jobs then introduced someone with whom he's shared the keynote stage before -- John Carmack, owner and Chief Technology Officer of id Software, the company behind such games as Quake and Doom.

Carmack presented to the audience a demonstration of a heavily textured 3D environment built using id Software's next generation technology, running on Mac OS X. Carmack told the crowd he'd just gotten it running on the Mac in the past few days, and encouraged attendees to look forward to other Mac-related announcements coming at QuakeCon, id Software's annual gamers convention.

"Moving on to the Big Cats" -- new Leopard features galore

"Now let's move on to our big cats," said Jobs -- a sly reference to Mac OS's code-names, all of which are based on wild cats -- Mac OS X v10.4 "Tiger" and Mac OS X v10.5 "Leopard" being the focus.

"Two-thirds of our users are running Tiger," said Jobs. "That's unprecedented in our industry. Ninety percent of our customers are running the current or current minus one release."

The first new feature of Leopard on exhibit during Jobs' keynote is a new desktop. The default blue pattern of old is gone, replaced with something showing grass with dew. But more to the point, a menu bar now adapts to what you put on the backdrop. The desktop is now translucent and the dock is more translucent than before.

Stacks are a new feature that let you group icons within the dock -- you click and a collection of icons pop up from a single folder. The new feature mimics popular third-party add-ons and dock replacement software, but with much more visual pizzazz, with glass reflective surfaces and vertical arrangements.

Jobs also noted that a new folder has been added to the dock called Downloads. By and large, users clutter their desktops by adding downloaded files to them -- this helps clear the average desktop of much of its clutter.

Leopard's Finder has also gotten an extensive upgrade. Spotlight, for example, is now capable of being used to search other Macs and servers on the network. A new Sidebar has been cleaned up, as well, with devices, shared items, places and such in groups.

"If you're a subscriber to .Mac, we have this really cool feature called 'Back to My Mac' that lets you share computers and files even when they're not on the local network," said Jobs. In a nutshell, "Back to My Mac" tells .Mac what your local Mac's IP address is, so if you're on the road with a laptop, you can establish a secure, encrypted connection to that home Mac and access files from it.

Finder also features Cover Flow, a feature adapted from iTunes which enables you to view Finder windows the same way you view iTunes cover art. Applications show up in Cover Flow as giant icons; you can even play QuickTime movies in place.

"Quick Look is great," said Jobs, moving on to another new feature of Leopard. "Quick Look lets you instant preview files without opening applications."

Quick Looks is based on a plug-in architecture so it can be expanded to work with any file type. As it stands now, the feature provides live file previews for text, images, movies, PDF files, Microsoft Word and Excel documents, among others. To demo the feature, Jobs found a file -- a QuickTime trailer of the forthcoming Disney/Pixar film "Ratatouille." Hitting the space bar on his keyboard caused the movie to start playing, expanded on the screen. Clicking the movie caused it to go full screen.

"Number four," said Jobs. "Leopard is 64 bit from top to bottom." This is the first time that 64-bit will be mainstream in the computer world, he said -- not only does mean Leopard's Unix underpinnings will be 64-bit, but so will Cocoa.

"One version of Leopard runs 32-bit and 64-bit apps side by side," explained Jobs. "If you write a 64-bit app, you can guarantee that it will run on every copy of Leopard out there."

To demonstrate the capability, Jobs loaded a giant photograph -- 4GB in size -- into a demo application that showed CPU and disk access. One version ran in 32-bit mode, the other in 64-bit mode. Running filters on both systems, the 32-bit version took 81 seconds to complete the tasks, hammering the hard disk in the process. The 64-bit version was able to load everything into memory, and finished in 28.48 seconds.

"We're seeing a real need for 64 bits not just in scientific computation, but we're hearing it more and more in the professional arts, whether it's animation or the high-end Photoshop market," said Jobs. "And please remember, almost every computer we ship is 64-bit capable."

Jobs also demonstrated Core Animation, which enables developers to perform extensive animation capabilities within their apps simply by calling forth core technology in the operating system, similar to how Tiger's Core Image and Core Audio technology works.

"Boot Camp's pretty amazing," said Jobs, moving on to the sixth major feature of Leopard on display at this keynote. "Since we put it out a little over a year ago, we've had over 2.5 million downloads of the beta. With Leopard, Boot Camp is now going to be build in. It lets you run Windows XP and Vista at native speed."

Jobs said that with the Leopard implementation of Vista, users will no longer have to burn a CD of Windows drivers or install those drivers separately -- it will be built in to the operating system.

Users concerned that Leopard would devalue third-party virtualization software like Parallels Desktop for Mac or VMware Fusion need not worry. Jobs called Boot Camp "a great complement" to those products and said, "There are three great ways to run Windows on a Mac." Apple is helping VMware and Parallels "as much as we can," said Jobs.

Jobs then revisted Spaces, the virtual desktop technology that he first unveiled at WWDC in 2006. Spaces was well fleshed out as a feature in 2006, and little seems to have changed -- it enables users to organize their work life, said Jobs.

Dashboard also gets an upgrade in Leopard. More than 3000 third party widgets have been created since Tiger introduced the feature, and Apple has added a new widget that lets you look up movie times. And to empower users to create their own Dashboard widgets, Apple will introduce in Leopard "WebClips," which enable users to "make a widget about almost anything on the Internet, and it's pretty cool," said Jobs.

WebClip enables users to "scissor" a portion of a Web page, then turn that into a standalone Dashboard widget.

iChat will also get a big overhaul with Leopard, beginning with better audio quality thanks to the addition of AAC-LD, or AAC Low Delay audio. Tabbed chats have also been added, along with iChat Theater, which enables users who are videoconferenced to display slideshows and other rich media with each other. Backdrops help you add some flair to your background while conferenced, as well. Jobs also revealed that anything that works with the new QuickLook feature will also work with iChat Theater.

Jobs demoed the capabilities of Leopard's iChat with Apple senior VP of worldwide product marketing Phil Schiller, producing Photo Booth-effects in live chat, turning Phil upside down, making him look like a Star Wars-style hologram, and dropping his mouth into a picture of George Washington. Jobs even had a bit of fun at Microsoft CEO Steve Ballmer's expense, making a photo of Ballmer appear to say "I love my Macs," then sticking out his tongue.

Number 10 on the list of Leopard enhancements is Time Machine, Leopard's automated backup technology. "We are all walking time bombs," said Jobs. "Misplacing information, mistakenly deleting them or worse. We want to solve these problems in such a simple way that everyone actually uses it."

With Time Machine, Jobs explained, you click on it and it automatically backs up everything, either to a local hard drive or network server, wired or wirelessly -- so you can use a hard drive you have connected to a new AirPort Extreme Base Station, for example.

Using Spotlight's search capabilities, you can "search back in time" for lost files, Jobs explained. You can preview the file with Quick Look to make sure it's what you want, restore it using a single click, or restore your whole Mac.

"The goal here is to build this in, and make it so simple and automatic that people just use it," said Jobs.

All of the new features of Leopard are being given to developers attending this week's WWDC -- they can retrieve their preview copies after the keynote.

Taking another opportunity to fire some sarcasm at Microsoft, Jobs said, "We've got a basic version, which is going to cost $129. We've got a Premium version, which is gonna cost $129. We've got a business version, $129. We've got an enterprise version, $129. And we've got the ultimate version, we're throwing everything into it, it's $129. We think most people will buy the ultimate version."

One more thing -- Safari?

"One of the things we haven't talked about today is Safari," said Jobs. "There are now more than 18 million Safari users. And if you look at Safari's market share, it has climbed from 0 to 5 percent across the entire internet."

"The Mac's market share is great, but we want to grow, and in order to do that we have to create a version of Safari for Windows. And that's exactly what we have done," said Jobs.

Safari 3 works on Mac OS X, Windows XP and Windows Vista, said Jobs. He showed some benchmarks that demonstrate Safari for Windows running twice as fast as Internet Explorer when loading Web pages and faster still with JavaScript.

"So what we've got is the most innovative browser in the world. but we've also got the fastest browser on Windows," said Jobs. It's twice as fast as IE, 1.6 times faster than Firefox 2, and features built-in Google and Yahoo search.

Apple is releasing a new public beta of Safari 3, both for Mac OS X and for Windows Monday, said Jobs.

The iPhone, and developers

The iPhone ships later this month -- June 29th, specifically. "I believe it's 6 pm in the evening when they'll go on sale," said Jobs.

"We have been trying to come up with a solution to expand the capabilities of iPhone by letting developers write great apps for it, and yet keep the iPhone reliable and secure. and we've come up with a very sweet solution," said Jobs.

This capability is being exposed through the full version of Safari that will run on the iPhone, said Jobs, using "Web 2.0"-style technologies like AJAX that will enable developers to create content that "looks and behaves exactly like apps," integrated with the iPhone and iPhone services.

"They can make a call, they can send an e-mail, they can look up a location on Google Maps," Jobs added for emphasis. What's more, distribution is simple because developers can put them up on their own servers, update the code themselves, and incorporate the built-in security that Web 2.0 applications provide.

"They run securely on the iPhone, so they don't compromise its reliability or security. And guess what? There's no [software development kit]. You've got everything you need, if you know how to write apps using existing Web standards," Jobs said.

Apple VP Scott Forstall demonstrated how this can work by showing an Apple directory application that runs in less than 600 lines of code. The application returned a search query from safari into an address book-style card, where the identified user could be called or e-mailed using the built-in services on the iPhone.

Jobs concluded the keynote by welcoming developers to the 300 sessions planned for this week, 94 hands-on labs and 1200 Apple engineers on site to help them with questions.